Frequent flyer programs

A frequent flyer program(me) is a type of loyalty program run by an airline or several airlines in conjunction, rewarding frequent passengers with extras and bonuses, and providing facilities aiding air travel with the sponsoring airline or airlines. The history of modern frequent flier programs started in 1970s and involved rapid evolution and expansion around the world. Most programs have similar designs.

Although frequent flyer programs offer attractive benefits to those who participate, those are mostly available only to the truly frequent fliers, who not only fly frequently but also spend a lot of money on air travel. Fulfilling the conditions required to get most benefits can be hard for a casual traveller, and the frequent flier programs are intended to divert from seeking optimal solutions, such as using competing carriers or purchasing the cheapest tickets. Navigating through the peculiarities of frequent flier programs can require much research and attention in order to maximize your benefits and avoid pitfalls.

Principles and economics of operation

As in many other retail industries, airlines set aside a certain percentage of income from every ticket sold to fund a loyalty scheme to the reward recurring customers. Frequent flyer programs are used to entice travellers to choose their airline over others consistently, and to entice additional travel.

Frequent flier programs sometimes have membership fees to join, after which it is up to you to collect the benefits by purchasing tickets and services. Tariff rules on a ticket dictate the amount of benefit you can receive, i.e. a cheap ticket found on a travel web site may yield few miles or status benefits.

On the other hand, do remember that it is the airline (or another business entity) that owns the programme, and it is up to them to set the rules. There is no binding contract that you enter and your entitlements to any benefits are at the whim of the programme operator. This means that the very captivating game of hunting for the most miles with awards in sight can become very disappointing if the operator decides to change the rules mid-way or even end it, which they can do without notice, penalty or compensation of any kind.

Airline alliances and partnerships

Main article: Airline alliances

Airlines that are part of an alliance generally allow passengers to both accumulate and use points or miles on other carriers within that alliance, however some restrictions may apply. Offering frequent flier benefits to programme members across the alliance is one of the founding ideas of an airline alliance.

Furthermore, some programmes are common within smaller groups of airlines, for example, the Miles & More programme is shared by Lufthansa Group airlines (including Austrian Airlines and Swiss), and by other Star Alliance members in Central Europe (while other Star Alliance members run separate programmes. Other airlines, such as Virgin Atlantic, offer co-operative programmes despite not being part of an airline alliance. Airlines also often have bilateral agreements separate from airline alliances that allow passengers to accrue miles of each other's frequent flyer programmes. One such example would be Qantas and China Eastern Airlines, which allow points on their flights to be claimed in each other's frequent flyer programmes even though Qantas is in OneWorld and China Eastern Airlines is in Skyteam.

While the programmes within an alliance offer reciprocal recognition of flights flown on each member airline, each programme has its own rules regarding points earning and redemption. It might happen therefore that a flight on the airline you fly the most will earn you more miles with its alliance partner airline than the airline you fly itself. On the other hand, miles are not equal both ways - one programme can require many more miles than the other for a similar benefit or award. Veteran frequent fliers engage in arbitrage exploiting those imbalances to their benefit.

Non-airline partners

Most frequent flier programmes include partners beyond airlines, most often service providers such as hotels, credit card and car hire companies. Therefore, you do not have to fly to acquire miles, although the number of miles you can get from these partners is not usually high, and status points are almost never provided.

Air miles

The most usual feature of a frequent flier programme is that a participant collects "air miles" for every flight segment flown. The "air miles" are the "currency" of the programme collected during participation and their amount is important to getting benefits.

While "air miles" were born out of the idea of awarding frequent fliers literally per every mile flown in the air, the economics of the airline business dictate many simplifications to the rule. For example, in most programmes, short-haul flights yield a fixed number of points tied more to booking class (which in turn determines the price paid for the ticket) than actual distance covered. Flying first or business class usually yields many more miles per flight than economy, usually by a factor of at least two.

Both because of the above and to provide unique identities to their programmes, many airlines choose to name the points collected in their programmes in a way unrelated to distance, e.g. Avios in British Airways' frequent flyer programme Executive Club. Miles, however, remain the most popular "currency" across frequent flyer programmes, regardless of whether the home country of the airline uses imperial or metric measurements.

Collecting miles

Airline flights

Who gets the miles?

For most frequent flyer programmes, it is irrelevant who purchased and paid for the ticket. The only thing that counts is who has flown, and since your identity is checked and proofed against the name the ticket was bought for at most airports, the airlines have a high chance of knowing who flew. That means that on the one hand, you collect your frequent flier benefits both for air travel you paid for yourself, and for travel paid by someone else, e.g. your employer or company, or tickets bought for you as a gift. On the other hand, if you purchase tickets for other people, even if they are travelling with you, you only get miles for the flights you completed personally. Your companions or people you bought tickets for can only collect miles in their own name.

The most straightforward way of collecting miles is by completing flights with the airline running the programme. Some programmes, as stated above, allow participants to collect miles by flying with selected other airlines as well, especially ones that participate in the same airline alliance. Missing Miles

Sometimes your flights may fall through the system, especial when flying with partner airlines. If you don't get your miles within a few weeks then most airlines provide a simple claim form through their website. Keep a copy of your flight ticket, since it will then be easier to find your flight with the exact flight number, date, name, etc.

You are generally awarded miles only after your flight has been completed, and it may take a few days for them to be credited to your account. If flying with a partner airline it might take even longer for your miles to appear. If you pay for a ticket but do not board the plane for any reason, whether you cancelled your booking or not, you do not get the miles.

Every flight has a predetermined number of miles it will add to your account once completed. The airline's booking system will usually show you the number of miles per flight and booking class when you are arranging your travel, so that you can factor this in when deciding on a particular connection.

Non-airline partners

Most frequent flier programmes allow you to collect miles for the services of their partners, most travel-related, such as hotels, car rental companies, airport retailers and such. Many of those partners maintain their own loyalty schemes and you are allowed to collect points on either of them - i.e. collecting miles for booking a hotel will not allow you to collect points in the hotel chain's loyalty scheme, so read the small print carefully.

Some companies such as public opinion or survey firms have the option of rewarding frequent flyer miles to your account when you answer their surveys. This is a way to earn miles without spending money and to keep the account in active status.

Affiliated credit cards

A popular offshoot of frequent flier programmes are affiliated credit cards, i.e. credit cards that allow you to collect extra miles by using them for payment, and often also simply by opening and maintaining the credit card account. This is done by the operator of the credit card, usually a bank or other financial institution, paying the airline to credit you with the miles. Using a credit card costs the customer (in the fees and interest paid) and the retailer that accepts the card (who pays to the operator an amount undisclosed to the customer), which is what the miles are funded out of.

Expiration

In many programmes, award miles or points do "expire" (disappear from your account) after a certain period of time passes, counted from when they were earned. This "expiration period" is often prolonged for frequent fliers who fulfill a certain condition, e.g. acquire a status or use the affiliated credit card. Some programmes offer the possibility of earning the privilege of "non expiring" miles.

Some programmes also close your account after a period of long inactivity (such as two years) and the points are lost. Check the conditions carefully.

Redeeming miles

Utilizing miles is the sweetest part for flyers. Usually the best value for miles are award flights but always watch out for special offer of affiliate partners of the programme. Individual programmes allows also points/miles and cash tickets. If that is interesting depends on the ratio miles/cash in comparison to the cost spent for miles.

Award flights

An award flight is a flight that is "awarded" to you in exchange for a certain number of points. Basically, it means that you can pay for your flight using the accumulated miles rather than money. This is the most common way of utilizing one's air miles.

Airlines will often publish a fixed table of award flight "prices", listing the number of miles required to fly between particular destinations or regions (e.g. between Europe and Middle East - 30,000 miles). Apart from that, there are often "mileage promotions" that offer particular connections at lower mileage values than usual. Award flights can be most often booked both as return or one-way flights, and with a choice of travel class, both affecting the mileage value of the flight. Many airlines that are part of airline alliances allow redemption for flights within the own alliances.

Most airlines include only the airfare part in award tickets. There are more components to the ticket price, such as security and ground handling surcharges, airport fees, taxes and so on. Therefore, especially on short flights between busy airports, there can still be a considerable sum to be paid for an "award flight". Some airlines allow this part of the ticket price to be paid with air miles as well, usually under a separate scheme - so you may have to spend twice as much or more miles on a ticket than the offer stated.

Some airlines have simpler frequent flier systems, where accumulated points go towards prices of regular tickets - you can purchase a ticket once the value of the points accumulated is equal or higher to its price. Other airlines allow for a purchase of the ticket with combinations of points and money.

The availability of seats on a flight that can be booked as "awards" is usually limited - you may find that some flights with seats still open are not available for award bookings. This is because airlines reserve only a certain number of seats for award tickets on all flights. Depending on the expected demand this number of seats will be decreased or completely closed. The best option is to either book very early or to check the load factor (i.e. what percentage of available seats is sold) for short-term bookings. Tools like KVS or expertflyer are only a good investment if you use award tickets often. In general the availability for award flights is better for own flights than with other alliance carriers. Usually award flights can be booked 365 days in advance.

Do bear in mind that, appraising the amount of money needed to gain a certain number of miles, and checking versus the prices you can pay for a regular ticket on a given route, short-haul award flights and generally award flights in Economy Class may not be really good deals. You may be able to purchase the same ticket at a very attractive price using cash and with less restrictions, if the given airline runs frequent promotion and the route is generally either highly competitive or underutilized. The best value for miles in most programmes are First or Business class longhaul award flights.

Upgrade awards

Another way to use your award miles is to "upgrade" yourself to a higher travel class. This is done by purchasing a regular ticket in a lower booking class and then using a certain number of points to book an upgrade, depending on availability.

It is usually only possible to upgrade yourself one class up, e.g. from Economy to Business or from Business to First. On flights that offer "enhanced Economy Class" (called "Economy Comfort", "Economy Plus" or the like - usually a costlier Economy class seat which offers more legroom, better location on a plane or some other enhancements), you can usually only upgrade to Business Class if you purchased your ticket in said "enhanced Economy".

Airlines sometimes also "upgrade" their frequent fliers with high status at no cost, both to offer them an added benefit and to open seats in Economy in cases of overbooking. If on your connection it is usually full in Economy and empty in Business and/or First, chances are high you will be upgraded if you are a "status" frequent flier. Those days, however, most airlines have sophisticated revenue/load management systems and rather offer upgrades for lower mileage amounts to all frequent fliers rather than do it for free.

Third-party awards

If a frequent-flyer programme has a partnership with a "third party", such as a hotel chain or car rental company, it is usually a two-way one. Not only can you earn miles using the "third party's" services, but you can also use your miles to purchase their services, e.g. book a hotel room or rent a car. The value for miles of such offers is often rather low, as the airline has to pay the "third party" for the services, rather than just give you a free seat on a flight.

Travel shops

Some frequent flier programmes with extensive membership run special "travel shops", were frequent fliers may purchase certain goods with their miles, and often also with money or a combination of miles and money. The goods on offer are usually airline-branded travel accessories and luggage, as well as certain gadgets such as model airplanes, stuffy toys or even limited-series Swiss watches. Such shops may be an interesting option of using your miles if you do not have enough for your dream flight and your miles are about to expire, or to procure a unique gift.

Travel shops are usually operated as online webstores, where you can pay both with your miles and cash, or a combination of both (and the goods are then delivered to a specified address). Many airlines who offer on-board shopping (items for purchase during the flight) have it integrated as well, so that you can pay with miles when purchasing mid-flight, and often buy the same items. You can also usually order some items bought online for on-board or at-gate pickup. Finally, some airlines give their travel shops an extra physical presence, e.g. Lufthansa runs a network of their WorldShops (for Miles&More members) at German airports.

Donating miles to charity

Finally, many frequent flier programmes cooperate with one or more charities and offer the option of "donating" your miles to them, which basically means the airline will pay a certain amount of money to the charity per every mile you donate.

Frequent flyer status

A second type of benefits, and one of the most coveted, is the frequent flier status that is usually awarded to those participants of the programme that fulfill certain conditions. This status then yields additional automatic benefits to the participant, not requiring "spending" any extra "miles".

Usually, the status is awarded to a programme participant who collects a given number of "miles" within a certain period. Alternatively, some airlines award the status to a participant who flies a certain number of flights or flight segments during a period. Oftentimes, you can attain a status either way

Most programmes evolved to provide a multi-tiered status structure, i.e. you can attain many different status levels depending on the number of miles or flights. The higher the status (i.e. the more miles or flights are required to attain it), the more benefits and higher their attractiveness, at least in theory.

Status benefits

Many of the benefits you can attain by acquiring a certain status in the frequent flier programme are the benefits usually given to passengers flying business and/or first class. The difference is that "status" frequent fliers get them, in principle, every time they fly, regardless of whether they fly first, business or economy. Other benefits can only be acquired by attaining the "status".

The benefits you can attain by acquiring a certain status in the frequent flier programme may typically include:

• Fast-track boarding - you will be allowed to board the aircraft at the gate before other passengers, and often be able to use a separate (quicker) security clearance beforehand.
• Lounge access - you will gain constant access to business- and first-class lounges at airports, regardless of whether you fly first, business or economy. At the higher tiers, you will often also be allowed to bring a guest into the lounge with you.
• Booking priority - you will gain the privilege to be able to book a seat on a flight even if it is "full" (meaning that somebody will be "bumped off" the flight to allow you to fly), although usually only in certain, more expensive, flight classes and under certain conditions.
• Waiting list priority - even if the flight is full and there is no way for you to book a seat, you will usually be given a priority on the waiting list over non-status hopefuls should a booking be cancelled or a passenger fail to check in.
• Dedicated customer service - a separate customer service team, mostly call centre staff, takes care of "status" passengers. This may come in handy whenever there is an unexpected disruption to your travel, and the dedicated call centre will quickly set up alternative arrangements.
• Allocation of exit row seats - if you want extra legroom, then having a higher status may allow booking of an exit row for free. Typically this is available with airlines that charge extra for such seats.
• Upgrade possibility - if there are open seats in a higher class (premium economy, business or first), an airline may decide to upgrade you to one of those seats at the last minute, even if you paid to travel in a lower class. In most programmes, this is solely to the airline's discretion and may or may not happen at any time. This is usually done if the lower class is overbooked, but there are seats available in the higher classes. In this instance, passengers with elite status are typically given priority for upgrades over other passengers.

The service you experience inflight is still dependent on the class of seat you are occupying. If you have a high 'Gold' status, but are travelling Economy then meals and other creature comforts will be exactly the same as Economy level. On the other hand, services before and after the flight (airport lounges, showers etc) will still be available to you at your status level, regardless of the class of ticket.

Frequent fliers with an enhanced status usually also earn a "mileage" bonus over regular programme participants on all flights, usually in the form of a fixed percentage of miles (anywhere between +25% to +100%, depending on status and programme) over the ones awarded regularly.

Acquiring and retaining status

Your status with the frequent flyer programme changes when you reach a certain number of status miles earned, flights or flight segments completed on your account. Your status is usually updated automatically, you should require a notification and a new shiny card reflecting that shall usually be sent your way. Your status changes whenever the miles or flights are booked to your account, which may take days or weeks after you complete the flights earning you those.

The programmes usually impose a period during which you have to complete the status-earning flights or collect status miles to earn a status. Some airlines require it to be done within one calendar year (so if you start in December you have very little chance of earning the status), and reset your status account at the start of every new year (which usually does not affect your award miles). Other airlines have a rolling status period, usually also lasting 12 months, during which you can earn your status. This means flights and status miles older than 12 months are not counted towards your status, but all other are, regardless of the calendar year they were earned in.

The status is usually awarded for a year or two years, during which period you are usually required to fulfill the same requirements (number of status miles or flights) to retain it as you would to gain it. Some older and more complicated frequent flyer programmes had included the possibility of earning statuses for a lifetime after amassing a very large number of miles, but this is becoming a very rare case.

Award vs status miles

As programmes evolved to allow frequent fliers to collect many miles by means not related to the airline's core revenue business, airlines started to distinguish between "status" and "award" miles. While every "mile" earned with the programme is, by default, an "award" mile, which means it accumulates on your account and can be redeemed for a reward/award, only some of those miles are "status" miles that count towards your status. This means that the airline will maintain two accounts for your miles, one for your "award miles", and the other for your "status miles".

Typically, only miles for flights with the particular airline who runs the frequent flier programme yield status miles. All auxiliary means of attaining miles (purchases with non-airline partners in particular or miles for using an affiliated credit card) usually yield award miles only and no status miles. Travelling with a partner airline in the same alliance will usually yield status miles, while travelling with one outside the alliance may or may not, depending on the specific bilateral agreement. That said, many airlines also impose a requirement to fly a certain number of flights or miles with that specific airline, in addition to having the required status miles, in order to attain a higher status.

Status miles are, in almost all cases, award miles at the same time, so a flight that adds 100 miles to your status mile account will also add 100 miles to your award mile account. This does not work the other way around, so a hotel booking that adds 100 miles to your award mile account will probably add nothing to your status mile account.

Other conveniences

While ostensibly the attraction of frequent flier programmes is the possibility to earn awards and acquire the status, there are also other systematic benefits that are available to all participants and can be a reason to participate even for a relatively in-frequent flier.

Airlines use the cards issued to frequent flier programme participants as identification devices across all communications channels. This way, participants do not have to remember all of their flight details (reservation number, flight number, e-ticket number etc.), but can identify themselves by presenting the card to a service agent (provided the agent has access to the programme's computer system) or automated kiosks. One of the most often used facilities is checking in and printing out boarding passes at the airport in automated kiosks, which saves time and allows you to book your tickets without using a travel agent or accessing a printer.

Most airlines also allow frequent flier programme participants to log in to sections their websites offering enhanced functionalities, such as:

• Quick access to bookings made or considered (you can "save" a flight for later consideration without making a booking), which helps you make quick changes without the need to know each booking's details beforehand
• Ability to enter personal data and preferences both for yourself and frequent travel companions and then use it for every booking. This simplifies booking for, e.g., somebody who always requires a vegetarian meal and always travels with their spouse, as those details will be available automatically rather than having to be typed in by hand with every booking.

Frequent flyer quirks and catches

Money spent vs miles flown

Unlike many simpler loyalty schemes in other industries which, in principle, simply reward you proportionally to the amount of money spent with a given retailer or brand, airline frequent flier programmes evolved into more complicated systems, involving other dimensions such as number of flights flown and miles covered. This means that you can accrue the same benefits (by flying the same number of flights or "air miles") by spending very different amounts of money, or put the other way around, find oneself having very different benefits when spending the same amount of money with an airline.

Flight segments vs flights

Many airlines distinguish between flight segments and flights, i.e. a direct flight with no stopovers or changeovers from London to Warsaw is both one flight and one segment, but a flight from London to Warsaw with a changeover in Copenhagen is one flight but two flight segments. For status purposes, the number of segments flown is often counted rather than the number of flights. There is also often a fixed number of miles per every flight segment, especially on short-haul routes, so multi-segment short-haul flights will yield more miles than direct ones.

Frequent fliers will often choose multi-segment flights over direct, if they can, to accrue more miles and flight segments to their accounts.

Travel insurance

If you have to cancel a trip that you have booked with miles due to illness etc, you may find that your travel insurance gives you no compensation for the cancelled flight.

Business travel

If you earn miles when travelling on business, with the flight paid for by your employer there are some potential catches. These are unlikely to impact most travellers but are worth being aware of.

1. Your employer may regard the miles earned as the employer's property. You could be required to use the miles to buy flights for business trips, or they might want a donation to be made to a charity before you use your miles for leisure travel.
2. Large employers may have special corporate rates with specific airlines. Tickets under these rates may provide fewer or no miles at all.
3. It is possible that the tax authorities could consider a leisure flight made using miles earned on business to be a "benefit" on which income tax is charged.

Government travel

If you are travelling on official government business, you might not be allowed to collect air miles. Check your policy beforehand. For example, United Kingdom, Germany and Australia have such restrictions to prevent government employees from favouring a more expensive airline ticket. This restriction usually does not extend to personal travel.

Death

Unlike bank accounts, your account will usually be cancelled and balance voided once the programme operator is notified of your death. That said, any person (e.g. a relative) who has access to the member's online account can perform most operations, such as transfer points or simply use them, before this happens, as no personal identification is required to perform those actions.

Corporate loyalty schemes

While frequent flyer programmes are strictly personal (i.e. earning miles and status is strictly limited to a particular person identified by name), many airlines also run concurrent corporate loyalty schemes, awarding "miles" or bonus points to corporations that purchase their tickets, regardless of who is travelling. This is to entice corporations and corporate travel planners to use the particular airline.

Such corporate loyalty schemes work very similarly to frequent flyer programmes in that miles earned per every flight, more or less proportionally to the money spent on the tickets, or at least to the profitability of those tickets to the airline, may be converted to "award flights". They, however, rarely if ever award "statuses" to participating companies. The company can freely decide how to use their "award miles" - for example, the corporate travel planners who rarely fly by themselves may get award flights as a bonus for their work planning travel for others.

The corporate loyalty scheme is usually run alongside the frequent flyer programme and both are complimentary rather than mutually exclusive, so that while a passenger continues to earn their miles, the corporation card earns its miles for the same flights. This means that every ticket, regardless of how it is purchased, contains a small contribution towards the corporate programme as well. Airlines can afford to fund both, as much less of the "corporate miles" are realized than the "personal miles", as many tickets are not bought by corporations, or purchased by companies who do not care to participate.

While frequent flyer programmes are often shared between airlines and allow a high degree of mutual recognition (earning and spending miles between airlines), corporate loyalty schemes may be much more limited in scope and often cover one airline only.